Oct 29 (Reuters) - Transportation ground to a halt along the
U.S. Northeast coast on Monday, stranding local rail commuters,
cruise passengers and air travelers from as far away as Europe
and Asia, as Hurricane Sandy prompted closure of air, ship, rail
and even highway service.

The transport woes also hit cargo operations, adding another
dimension to the storm's economic toll.

New Jersey's Garden State Parkway, which has been ranked
among the busiest U.S. toll roads, was closed Monday in both
directions along its southern 63 miles because of flooding.

Massive cargo container operations in New York and New
Jersey shut down very early Monday, and will stay closed
indefinitely, the port authority said, stranding millions of
dollars worth of goods arriving for the holiday season.

The cost of the cargo disruptions probably won't be large,
said Arthur Hatfield, managing director of equity Research at
Raymond James in Memphis, Tenn. While cargo gets backed up it
eventually gets delivered. "Nothing disappears," he said.

"The only time we've ever seen a storm that had a lasting or
immediate impact on logistics and or freight volumes was
Katrina," he added. Sandy is a Category 1 hurricane, he noted.
"You've got to remember Katrina was a Category 5 and the storm
surge was something they'd never seen."

CSX Corp the nation's second-largest publicly owned
railroad company, shut its network between Richmond, Va., and
Albany, N.Y., early Monday. The closure included Boston and
extended as far west as Brunswick, Md.

Norfolk Southern Corp said rail traffic from Virginia
through New England could be affected by flooding and high
winds, and told customers to expect delays of at least 72 hours.

Some freight companies said they would keep working where it
was possible. "We're going to be doing operations as long as we
possibly can, as far as pickup and delivery goes," said Chris
Stanley, spokesman for FedEx Corp, the second-largest
package delivery company in the U.S. "If we are able to safely
move, we will."

United Parcel Service Inc began rerouting packages
and airplanes over the weekend. On Monday it suspended delivery
in Delaware, Maryland and Washington, D.C., but dispatched
delivery trucks in Manhattan, Connecticut, Westchester County,
Nassau County and Suffolk County.

In New Jersey, UPS sent out about half of its drivers
Monday, and most drivers continued working in New England.
Operations were normal in Pittsburgh, central Pennsylvania, West
Virginia and Virginia, except along the coast. UPS said it was
planning for significant snow in some areas.

It's "too soon to put any dollars around impacts or to look
at any specific sectors," said Susan Rosenberg, a spokeswoman
for UPS.

Airlines canceled more than 11,500 flights for Sunday,
Monday and Tuesday, including more than 6,800 so far Monday
alone, Flight-tracking service FlightAware said.

The tracking service said it expected that figure to grow as
the storm hits later Monday. Philadelphia's airport was the
hardest hit, with 1,220 cancellations on Monday. The service
said the three New York area airports had each canceled about
1,000 flights for Monday.

New York and Washington, D.C., area airports remained open
even though flights have been canceled.

The Federal Aviation Authority said Monday that air traffic
control towers were closed at regional airports:
Hartford-Brainard and Groton-New London in Connecticut;
Northeast Philadelphia in Pennsylvania; Atlantic City and
Trenton, New Jersey; and New Castle, Delaware.

United Continental Holdings, the world's largest air
carrier, canceled 3,700 flights for Sunday through Wednesday, or
about 16 percent of total flights scheduled during that period,
because of the storm, a spokesman said on Monday.

Delta Air Lines said it canceled approximately 2,100
flights from Sunday night through Tuesday morning.

Transportation consultant George Hamlin estimated that Sandy
could cost the airline industry hundreds of millions of dollars.
On top of lost flight revenue, airlines likely will have to pay
their crews extra if they are stranded away from home base.

"If you cancel a day or two's flights, it may take some
people days to get to where they want to go," he said.

New York suspended service on mass-transit systems for New
York, Long Island, Staten Island and Metro-North. PATH train
service between New York and New Jersey also was suspended.

Amtrak canceled service along the Northeast corridor for
Monday, and nearly all service along the Eastern seaboard,
through Tuesday.

Carnival Corp canceled two departures, from
Chesapeake Bay and Norfolk, Va., because of the storm and
shifted departures of other cruise ships.

Hotel reservations desks hummed with calls from thousands of
stranded travelers, seeking to either cancel or find
accommodation around major cities in the Northeast.

Starwood Hotels & Resorts Worldwide Inc - which
operates hotels such as Westin, Sheraton - and Marriott
International Inc hotel groups received numerous calls
about New York reservations.

"A lot of people are cancelling," a reservations employee
said, but said others are coming because the hotels have power
generators.

"People are really just frightened of the storm ... they're
frightened of water levels and they're frightened of losing
power and they want to be somewhere where they're safe," the
employee said.

A reservations worker for Marriott said her work day had
been "really crazy" with all the calls for cancellations and
last-minute reservations, including calls from corporations
booking blocks of rooms for their employees.

Corporate representatives for Starwood and Marriott were not
immediately available for comment Sunday.